Correlation Between Bjorn Borg and G5 Entertainment
Can any of the company-specific risk be diversified away by investing in both Bjorn Borg and G5 Entertainment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bjorn Borg and G5 Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bjorn Borg AB and G5 Entertainment publ, you can compare the effects of market volatilities on Bjorn Borg and G5 Entertainment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bjorn Borg with a short position of G5 Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bjorn Borg and G5 Entertainment.
Diversification Opportunities for Bjorn Borg and G5 Entertainment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bjorn and G5EN is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bjorn Borg AB and G5 Entertainment publ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G5 Entertainment publ and Bjorn Borg is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bjorn Borg AB are associated (or correlated) with G5 Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G5 Entertainment publ has no effect on the direction of Bjorn Borg i.e., Bjorn Borg and G5 Entertainment go up and down completely randomly.
Pair Corralation between Bjorn Borg and G5 Entertainment
Assuming the 90 days trading horizon Bjorn Borg AB is expected to generate 0.89 times more return on investment than G5 Entertainment. However, Bjorn Borg AB is 1.13 times less risky than G5 Entertainment. It trades about 0.07 of its potential returns per unit of risk. G5 Entertainment publ is currently generating about -0.02 per unit of risk. If you would invest 3,369 in Bjorn Borg AB on November 27, 2024 and sell it today you would earn a total of 2,299 from holding Bjorn Borg AB or generate 68.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bjorn Borg AB vs. G5 Entertainment publ
Performance |
| Timeline |
| Bjorn Borg AB |
| G5 Entertainment publ |
Bjorn Borg and G5 Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bjorn Borg and G5 Entertainment
The main advantage of trading using opposite Bjorn Borg and G5 Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bjorn Borg position performs unexpectedly, G5 Entertainment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in G5 Entertainment will offset losses from the drop in G5 Entertainment's long position.| Bjorn Borg vs. New Wave Group | Bjorn Borg vs. Clas Ohlson AB | Bjorn Borg vs. BE Group AB | Bjorn Borg vs. Betsson AB |
| G5 Entertainment vs. Stillfront Group AB | G5 Entertainment vs. Paradox Interactive AB | G5 Entertainment vs. Catena Media plc | G5 Entertainment vs. Betsson AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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